A cooperative industry pallet pool has successfully served the brewing industry in the Netherlands since 1994. It transitioned from a standard wood pallet to plastic pallets in 2012, resulting in longer pallet life and improved functionality, according to DPE.
Christiaan Hamminga is Director of Dranken Pallet Beheer (DPB), the successful cooperative industry pallet pool established in 1994 by the Dutch Brewers Federation. While he stressed that the pool is not in growth mode and is not looking for publicity, he agreed to provide for us a few insights into its operation. By way of background, I first wrote about the DPB pallet pool back in 2005, after visiting DPB in Amsterdam. In 2012, the pool transitioned from wood pallets to plastic pallets.
RPN: Can you give us a bit of background about why the DPB pool was formed, and when?
CH: DPB was established 25 years ago. Before that moment all main beverage suppliers had their own wooden pallet, all slightly different. On behalf of Albert Hein (the largest retailer in the Netherlands) the request was lounged to sit together and design one uniform beverage pallet. The reason for this request was to make return handling much more efficient. So, not eleven different pallets anymore but just one. The platform of Dutch Brewers Federation was used to set up the pool.
RPN: Who owns the pool and how is it administrated?
CH: The pool is owned by members of the Dutch Brewers Federation. These 8 members are the shareholders.
RPN: How many pallets are in the pool and what is the annual replacement rate?
CH: There are approximately 680,000 pallets with a replacement rate of 5%, based on damage.
RPN: I understand that beverage producers and retailers in the Netherlands are the main participants. Are there other industries also participating, and does it span into other countries?
CH: Other industries who are participants are beverage wholesale and Horeca wholesale (Sligro, Metro). Besides beverage producers there are two producers of canned fruit and vegetables. The span of the DPB pallet is only in the Netherlands. The main reason is that the pool makes use of (and is obliged to maintain) refund. The refund rate is € 22,50. The refund for pallets is not accepted in Belgium and Germany.
RPN: Why did the pool shift to plastic pallets from the previous oak hardwood pallets?
CH: Efficiency, circularity and costs are the main reasons. Related to costs, the replacement rate of the wooden pool was 25%. With plastic this replacement is reduced to 5%.
RPN: Were there any hurdles in getting the pool participants to accept the change to the plastic pallets, and how were these addressed?
CH: We have tried to inform our participants as often and as detailed as possible. All users (main retail DC’s) received a number of test pallets to see if the use causes any handling stops. All pool members had the obligation to go through a detailed test protocol and sign the final test documentation for acceptance.
RPN: How have participants benefited from the shift to plastic pallets?
CH: Fewer problems with conveyor belts, lower damage rate, better performance, lower costs.
RPN: I seem to recall that the pool model is a monthly or annual lease and that pallets are exchanged between participants. Is that correct?
CH: Per pool member, the number of rented pallets is fixed in a pallet calculation model. This model needs to be signed every year. Based on this number, the pool members pay a fixed amount per pallet per month. There are no exchanges between the pool members. The pool members ship and return pallets to the market players.
RPN: How do participants manage pallet exchange imbalances with their trading partners? Is there a recommended tracking software?
CH: Pool members need to keep track on the pallet numbers they ship and return to the market. This needs to stay in balance. We use a custom built software program to follow the pallet flows of our nine largest pallet pool members.
RPN: How many employees work for DPB?
CH: We have three part-time employees, in total 1.2 FTE.
RPN: How is DPB able to work efficiently for its members?
CH: Transparency and simplicity. All members are treated equally and they are aware of the fact that they need to cooperate for the best results in the pool.